Chairman's Statement

Tribute to Our Late Chairman

The Group is saddened by the passing of our respected late Chairman, Y. Bhg. Tan Sri Datuk Dr. Henry Chin Poy Wu, on 23 October 2016. On behalf of the Company, the Board would like to take this opportunity to convey our deepest condolences to the families and friends of the late Tan Sri.​During his tenure as the Independent Non-Executive Chairman of the Company, Tan Sri had played his oversight role diligently and contributed immensely in enhancing the Group’s corporate governance framework and practices. We are privileged and honoured to have the service of Tan Sri as our Chairman. Our memories of Tan Sri will forever be cherished and his presence deeply missed.

Industry​Overview

​Malaysian economy continued to grow in 2016 but at decelerated pace with the full-year real gross domestic product (GDP) growth of slightly above 4%, supported by the private sector consumption and investment. The operating and business environment was challenging during the year affected by various external macroeconomic factors including slower growth in the advanced economies, prolonged low oil prices and volatile international financial markets due to the uncertainties associated with Brexit and US monetary and international trade policies post-election.

Although the construction sector recorded a growth in excess of 8% during the first half of 2016, primarily fueled by the accelerated civil engineering projects and development of residential properties particularly affordable housing, it has been a challenging year for building materials segment as the market competition intensified. The weakening of Ringgit Malaysia, rising production and operating ​​costs and price competition have weighed on the profit margin of the building materials segment.

Prospect

Looking ahead, the downside risks to global growth is expected to continue due to the uncertainties and concerns associated with Brexit, new monetary and international trade policies under the Trump’s administration as well as slowdown in China’s economic growth.​On the domestic front, Malaysia’s economy is generally expected to continue a healthy growth in 2017. The construction sector is generally expected to register steady growth in 2017, backed by the public spending on development and infrastructure projects with close to RM95 billion earmarked in the Budget 2017 and private sector investments and housing development projects.​Despite the relatively positive outlook for the construction sector, the industry competition is expected to intensify further in view of the rising operating costs and fluctuations in foreign exchange rates.​The Group will continue to take all reasonable steps and precautions to mitigate the impact of rising costs and intensifying market competition. The Group will, from time to time, identify appropriate new business venture and opportunity to enhance and expand the Group’s revenue base and source.

Appreciation

​On behalf of the Board and the Company, I would like to extend our sincere gratitude to the Management and employees for their dedication, efforts and loyalty to the Company during this challenging year. Our appreciation also goes to the former and fellow Directors of the Company for their advice, guidance and commitment that helps the Company in confronting the hurdles and challenges throughout the financial year.

We would also like to express our deepest gratitude to our valued shareholders, customers, suppliers, associates bankers and dealers who continue to believe and support us during the challenging times.